ABSTRACT
Staff keep cash tips, either individually or on a pooled basis, and do not pay tax on them, unless they are declared. Staff working in pubs, bars and restaurants are more likely to benefit from tips than hotel staff. Staff are not entitled to receive tips or a service charge that are added to a credit card in addition to the NMW, although employers can use these payments to top up pay to the level of the NMW. This situation was finally confirmed by a ruling of the European Court of Human Rights in 2002. Where tips are paid into a tronc, the tronc master shares them among employees who are taxed on them.
